What is the use of reward points in credit card?

Wants to know about the reward points received on usage of credit card. Here are the tips given by our experts.

Nowadays, most of the people buy different items through their credit cards. They buy more items even if there is no such requirement of buying but to accumulate more reward points. Since, they won't get points with minimum buying, they try to buy unnecessary things to get more points. What is reward points in credit card and how to redeem reward points? Are there any real benefits of reward points in credit cards?

Reward points are like cashback to the customer. In such scheme some amount of points are given back to the customer. This is so that the customer can make use of the offers and discounts on other products. Rewards points also make use of the sales pitch as a way to retain the customer. Other business can work on this scheme and get more leads. So with credit card companies reward points, usually usable in restaurant and flights. So other companies benefit from this.

You can redeem such points on many places. Some petrol pumps accept reward points as an discount on their purchase. Some hotels also accept the reward points. In case of the larger reward points scheme some shops allow gift cards. This can be used for shopping online. Vodafone allows bill payment with such reward points.

So you can see the benefit of such points depend on how much you can accumulate. That's what decides the benefit of such cards.

While using a credit card, it is better to forget that there is anything like reward points. Also the bills should be settled within the due time without paying any interest to the card card company. It should not be forgotten that some processing charge is also involved while making payment through the credit cards. The websites of the credit card companies provide details as to how to use the accumulated reward points. Generally they offer some products also in exchange of accumulated reward points. I prefer to exchange my reward points with some product on offer without getting caught into the trap of buying more by use of credit cards. The other options provided by the credit card companies are to redeem the accumulated reward points for settling outstanding amount on card, receive gift vouchers and avail 'points+ pay' option.Let us encourage each other in sharing knowledge.

First of all you should know why banks are giving required points whether it is a credit card shopping or debit card.Now days all banks are giving reward points for Card transaction ( although there is different category available as per your card).When we do shop through Debit card or Credit card, bank charge some specific amount the seller ( around 1.5% for each transaction) and bank give some part of amount to the customer).It is because by doing card transaction we save the paper currency transaction to get wastage, as well as the money transaction get white.

When bank give us reward point, that can be redeem in two way either it converted to cash at certain points or we get eligible to order some gifts, or coupons with that points.

In Credit card or Debit card business banks or the financial institutions have to earn more income by way of charging interest in one or the other way. One of these attractions to the card holders is reward points wherein the card holder is attracted to have more reward points which he can redeem at hotels petrol bunks and shopping malls usually where card business will take place. Normally if you go for shopping in any other super market or malls several types of offers will be there to avail discount by way of paying through cash. But if you make the payment through cards there also you will get the discount but you have to pay abnormal interest on the transactions done to the card divisions in turn they do not bother to shell a portion of the same to you by way of reward points or cash back facilities for which the customers will be easy prays.

I have used the reward point of ICICI and would like to tell you the best ways how you can utilize them.• ICICI-In ICICI you have a payback number associated with your account. You also get payback card from Big bazar etc. which can be coupled with the ICICI account payback number.• SBI and others- You get rewards which are shown in the net banking. For very purchase of X amount you get Y reward point. This may be different for different banks and different card types.

How to redeemI redeem it through Mobikwik which is a app.1)Make an account on mobikwik2)Click on Profile -> My wallet _>Redeem Points3)Here you can enter your debit card number/credit card number or payback card number issued by bank or Big Bazar etc.4)You are done. All your reward points are converted to money5)You can use this wallet to do online recharge or can also be used to shop on sites like Amazon,Myntra etc. and also be used for Auto rides on Jugnoo or Food Partners like Zomato and Food Panda.Keep earning.Good Luck

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